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sume the following information regarding U.S. and European annualized interest rates: Currency U.S. Dollar ($) Euro () Lending Rate 6.73% 6.80% Borrowing Rate 7.20% 7.28%
sume the following information regarding U.S. and European annualized interest rates: Currency U.S. Dollar ($) Euro () Lending Rate 6.73% 6.80% Borrowing Rate 7.20% 7.28% Trensor Bank can borrow either $20 million or 20 million. The current spot rate of the euro is $1.13. Furthermore, Trensor Bank expects the spot rate of the euro to be $1.12 in 90 days. What is Trensor Bank's dollar profit from speculating if the spot rate of the euro is indeed $1.12 in 90 days
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